by Ben Vernia | May 30th, 2014
On May 29, the Department of Justice announced that it had filed a complaint in intervention in the District of Columbia in a qui tam suit against CA, Inc., which alleges that the information technology contractor overcharged the government on a Multiple Award Schedule contract it held with the General Services Administration for software licenses and maintenance. According to DOJ’s press release:
The government has filed a complaint against CA Inc. (CA) for violations of the False Claims Act in connection with a General Services Administration (GSA) contract, the Justice Department announced today. CA manufactures and sells information technology products and is headquartered in Islandia, New York.
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In September 2002, CA entered into a GSA contract to provide software licenses, software maintenance, training and consulting services to various government agencies. The government’s complaint alleges that, since at least 2006, CA knowingly overcharged the government for software licenses and maintenance in various ways. For example, the government alleges that CA provided incomplete and inaccurate information to GSA contracting officers during negotiation of contract extensions. At the time CA negotiated these extensions, applicable regulations and contract provisions required CA to fully and accurately disclose how it conducted business in the commercial marketplace, so GSA could use that information to negotiate a fair price for government customers. The government also alleges that CA failed to truthfully update its discounting practices during the life of the GSA contract. CA repeatedly certified to GSA that its discounting policies and practices had not changed, when in fact its discounts to commercial customers had increased.
The government’s complaint also alleges that, since 2002, CA failed to apply properly the contract’s price reduction clause. The contract required CA to monitor discounts to certain commercial customers, compare these discounts to the discounts given to the government and, if the commercial discounts were higher, pass on those higher discounts to the government. The government alleges that CA failed to make those comparisons or, when it did make such comparisons, failed to do so correctly, resulting in the government overpaying for CA’s information technology.
CA’s contract is a Multiple Award Schedule (MAS) contract. Under the MAS program, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies. Agencies that purchase under CA’s contract include the Department of Defense, the Department of Energy, the Department of Health and Human Services and the Department of Labor.
(The Court’s docket did not reflect the government’s filing as of the time of this writing.)
